Modi’s two summits: UAE trumps G7

Contact Counsellor

Last Updated29/06/2022

Prime Minister is scheduled to attend two summits this week
- ‘Special invitee’ at the 48th G7 Summit in Germany.
- A bilateral summit in Abu Dhabi with the UAE President

If U.S. is exempted, no G7 country comes close to UAE as India’s trading partner, exports market, Indian diaspora base and their inward remittances.
According to Foreign Direct Investment data, UAE invested more in India in 2021 than Germany and France combined.
None of the G7 countries has yet signed a bilateral Comprehensive Economic Partnership Agreement (CEPA) with India.

The current India-UAE synergy is largely due to Prime Minister’s tending.
These have re-energised this historic, but long-dormant, relationship.
Mr. Modi would commiserate the passing away of UAE President Sheikh Khalifa bin Zayed and appointment of Sheikh Mohammed, 61, as his successor.
He will be the first non-Arab leader to be received in Abu Dhabi after the 40-day State mourning ended.
Abu Dhabi summit would be useful opportunity to recalibrate bilateral ties and open new vistas following the operationalisation of the bilateral CEPA from May 1.

Bilateral trade grew by 68% in 2021-22 to $72.9 billion.
Both exports and imports grew, trade deficit reached $16.8 billion.
With CEPA, economic revival, higher oil prices and larger Indian imports, trade is likely to grow even higher in 2022-23.
Corrective mechanism built into CEPA would, hopefully, prevent the deficit from going out of hand.
As the UAE collects petrodollars, India, the world’s fastest-growing major economy, could be a lucrative market for investments in areas such as petrochemicals, pharmaceuticals, renewables, infrastructure, manufacturing, logistics, start-ups, etc.
Lot has been done to streamline the manpower sector but more can be done.
Two sides can collaborate for reconstruction of war-ravaged regional countries such as Yemen, Syria, Somalia, Iraq, Libya and Afghanistan.
In bilateral political domain, the two sides have cooperated efficiently on security and anti-terrorism, but more need to be done to fight money laundering and the flow of illicit narcotics.

The South West Asian region is a complex and evolving area.
The UAE has disrupted the longstanding Arab Israeli stalemate by normalising relations with Israel in 2020.
After pursuing a muscular regional foreign policy against political Islam and in regional hotspots such as Syria, Yemen, Libya, Sudan, and Somalia, Abu Dhabi seems to have decided to stage a phased withdrawal and improve ties with Syria, Qatar and Turkey.
The ties with Saudi Arabia remain somewhat edgy, due to policy divergences and economic competition.
Similarly, it has developed some ructions with the Biden presidency and is diversifying its strategic options with Russia and China.
It has ignored pleas by U.S. and other Western countries to raise its oil production.
India, UAE’s second-largest trading partner, and largest source of tourists and manpower can be a useful ally.

Against this ongoing regional and global flux, India-UAE summit is both topical and opportune and can have an impact beyond the bilateral context.